Small business optimism in September gave back most of the gains it had made in August, but it still counts as one of the better results so far in 2013. CFIB's Business Barometer® Index dropped 1.4 points to 64.5 this month; however, only January, February and August saw higher index values.
On a scale between 0 and 100, an index above 50 means owners expecting their business’ performance to be stronger in the next year outnumber those expecting weaker performance. One normally sees an index level of between 65 and 70 when the economy is growing at its potential.
The long standing pattern showing highest optimism in Newfoundland and Labrador, Alberta and Saskatchewan has been maintained. Modest improvements in business sentiment are seen in Nova Scotia, Manitoba and British Columbia, while the opposite holds true in Ontario, New Brunswick and Prince Edward Island. Quebec's index shows stability, but at levels still more than six points below the Canadian average.
Remaining indicators show a general level of stability. Full-time hiring plans are typical for this time of year, with 19 per cent expecting to hire and 11 expecting to downsize in the next few months. Forty per cent of owners report a generally good state of business, while orders and accounts receivables show gradual trending improvements. Pricing expectations remain stable--averaging 1.3 per cent annual growth, while wage expectations are trending just a little higher at 1.6 per cent. Business owners are not reporting any dramatic shifts in operating constraints or pricing pressures.
This report was prepared by Ted Mallett, Vice-President & Chief Economist of Canadian Federation of Independent Business and is available on the CFIB website at: http://www.cfib-fcei.ca/cfib-documents/rr3303.pdf.